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CRM software fails sales

A survey of sales organizations finds that CRM programs are failing to help increase revenues.

CRM isn't living up to expectations at a majority of sales organizations.

According to CSO Insights, a sales consultancy based both in Boulder, Colo., and San Francisco, the areas where CRM provides benefits aren't the ones that matter most to sales professionals. The firm recently completed its annual survey of more than 1,300 sales organizations and found that what companies hope to achieve with CRM and what they actually get are two different things.

"The reasons that people undertake CRM are to increase revenue, increase effectiveness -- basically sell more, better," said Barry Trailer, partner with CSO Insights.

Yet survey respondents who have had CRM systems for two years or longer said the main benefits they have derived from CRM are better communication and increased efficiencies.

"I don't think anyone undertook these projects and got approval to spend time, energy, resources and interrupt salesforces just so they could have better communication internally," Trailer said.

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According to the survey, 62% of respondents said the primary benefit they got from CRM was improved sales communications. Another 46% said forecast accuracy had improved, and 42% said CRM reduced administrative burdens. Only 21% said CRM helped to increase revenues. Yet when asked to identify their top objectives for the next year, 64% of respondents said increasing revenues, followed by increasing sales effectiveness at 56%.

"We keep looking at this disconnect about why people are embarking on CRM and what they [actually] get, and it's profound," Trailer said.

Even forecasting -- one area where sales professionals said CRM provided some benefit this year – leaves plenty to be desired. Trailer said that forecast accuracy has dropped from 50% to 30% to 20% in the past three years.

"That is not a pipeline, but a forecast, the deals people say 'are going to close,'" he said. "Forecast accuracy is horrible. It's really an indictment of sales management, how bad forecast accuracy is."

CRM takes time

The study did find that organizations which have had CRM for several years or more tended to have more success, offering some hope to companies that have invested heavily in the technology.

In addition, CRM is becoming more mature. The percentage of organizations that had a CRM system in place for two or more years jumped from 39% last year to 49% this year.

Accordingly, success rates and revenue increases also go up with more mature CRM deployments.

"I'm sure we could pick out companies whose numbers are well above average, and I think we would find those companies have had CRM [programs] for some time," Trailer said. "But I would suspect the difference is not their CRM [technology] but their management. CRM isn't what makes the difference; people embracing the tools makes the difference."

CRM is failing to live up to expectations before it even gets started. According to the report, 30% of implementations were over budget, and another 11% were significantly over budget. That's an increase over past years, and it's largely a result of a lack of budget for end user training and ongoing hotline support, according to the report.

The report indicates that a fair number of organizations are looking to replace their CRM systems. Companies that invested in CRM before 2000 are now considering replacing that system with another application that may be easier to use, less costly or more flexible.

"Just going out and buying CRM is like just buying sales training or buying a gym membership," Trailer said. "If you don't embrace it and change your behaviors, it's not going to make a huge difference. If you do those things, over time it makes an enormous difference. The numbers [in this report] bear that out in no uncertain terms."

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